Even the Bond King Can't Escape Reality

Bill Gross – who folks in finance know as the "Bond King" – isn't a fan of how his estranged son Nick turned out.

According to Gross, Nick is a "disappointment." The 31-year-old millennial is covered in tattoos. And he wants nothing to do with the Bond King...

The tattoos are a big problem for Gross. Nick even has the name "Gross" tattooed on the inside of his lip. His father calls it "revenge by tattoo." And he has no control over it.

The market, according to Gross, has been tattooed too. And he says it has ruined our shot at making money. But here's what's surprising...

Gross is dead wrong.

Today, I'll show you why...

Gross, if you don't know already, founded and managed the investment firm PIMCO. It managed the world's largest bond fund at its peak. And Gross was labeled "the nation's most important bond investor" by the New York Times.

So, "Bond King" might sound a little grandiose. But Bill Gross is the real deal.

That makes his latest investment outlook letter – where he covers the global economy's "tattoos" – incredibly compelling. And the financial media has had a field day with it.

"There is little money to be made almost anywhere in the world – COVID-19 vaccine or no," Gross writes.

That, as I'm sure you can guess, is the headline the media latched on to. But in doing so, they missed the larger point.

We live in a zero-rate world.

For a bond guy like Gross, this observation is obvious. He spends a lot of the letter talking about yields, rates, and central banks.

He knows that we're playing by a new set of rules now. And that's true. You need to make sure your investments are designed to work with this new zero-rate rule book.

As an individual investor, you need to understand the new rule book if you're going to succeed. And the most important thing to know is that returns are being concentrated into a handful of highly specific market segments.

This means it's more important than ever that you put your money to work in the right places. If you don't, you'll fall right into the pit that Gross is warning investors about.

If you're focused on bonds like Gross, then sure... there's little money to be made in the world. But if you open your mind to other opportunities, the reality is much different.

Our zero-rate world means the stock market has no competition. You might think stocks are expensive. But compared to what? Bonds that pay nothing?

The reality is that in this new world, stocks are the winner. They're the obvious place dollars will move into... because those dollars can't earn interest anywhere else.

The rules have changed. We live in a zero-rate world. We can't change it... just like Gross can't change the tattoos on his son's body.

Make sure that your investments align with this reality.

Good investing,

Vic Lederman

Further Reading

"Staying long might feel uncomfortable right now," Chris Igou says. The markets are frightening right now. But we're seeing signs that stocks have big upside potential over the coming years... Read more here: What to Make of the Market's Best Quarter in a Decade.

"The Fed has lit the coals of the next great asset boom," Steve writes. Just like it had during the 2008 financial crisis, the Fed has slashed rates down to near zero. And just like back then, it means we could see outsized gains in the days ahead... Get the full story here: Today's Surprising Echo From the Global Financial Crisis.

DailyWealth Premium

It's time to buy a clear winner in today's data revolution...

With U.S. stocks facing little competition in the markets, we could see much higher stock prices from here. And this company could lead the way, thanks to the data revolution…

Click Here to Get Immediate Access

Market Notes



Boston Beer (SAM)… beer
Dollar General (DG)… discount retail
Nike (NKE)… athletic apparel
Lennar (LEN)… homebuilder
Guardant Health (GH)… health care


HSBC (HSBC)… untrustworthy bank
Nordstrom (JWN)… “death of retail”

Click Here to Continue Reading
Recent Articles
Take Advantage of This Reversal and Send Your Portfolio Soaring

As longtime readers know, the biggest gains often start from extremes in the market. When something gets out of whack in the investing world, it tends to not just correct itself... but overcorrect. We're seeing a situation just like that today...

This Signal Says You Want to Own Silver Today

We're likely still in the early stages of a long bull market in precious metals. And as this situation plays out in the years ahead, silver will likely prove to be a valuable asset...

Why the Recent Pullback Is a Bullish Sign for Stocks

On Friday, the benchmark S&P 500 Index dropped below its intermediate-term trend line for the first time in four months. The trend is still up. But a lot of investors and traders start to worry when stocks fall below this widely followed level...

Emerging Markets Are the Big Winners in a Dollar Decline

History shows that buying emerging markets in times like these is the best way to profit from a dollar decline. And it could easily lead to hundreds-of-percent gains...

The Bear Market No One's Paying Attention To

I believe the latest pullback will give way to even higher highs. But there's a side effect to the Fed's massive monetary stimulus...

The Only Place You Can Profit From a Daily Commute

"It's only three more stations that way!" my friend Dan shouted, as we brisk-walked along the busiest street in Bangkok, Thailand. After spending nearly three hours on foot, I couldn't wait to reach Bang Na Station... The thing is, Bang Na Station wasn't even there the year before. This got me thinking about a great investment opportunity most people visiting this part of the world often take for granted. Let me explain...

The Stage Is Set for the Rise of the 'Next Chinas'

China's economy grew so fast, a lot of people missed what was happening. The rest of Asia's emerging markets had a front-row seat to China's economic miracle. And now they don't want to be left behind...

Silicon Valley's 'Fatal Flaw'... And How to Avoid It

As Doc shows readers today, if you want to invest successfully in the tech sector, you need to watch out for this fatal flaw...

You've Got to Own Stocks Now

I've learned to follow my buddy Jim when he gets excited. It's worked out well for me in the past. And it turns out, the opportunity he saw recently is far from over...

View Full Archive